Gold is down slightly in early U.S. trading. The yellow metal is mostly maintaining yesterday’s post-FOMC gains, but the corresponding retreat in the dollar seems to have stalled following this morning’s round of generally favorable economic data.
Initial jobless claims for last week were lower than expected. November retail sales were in line, but ex-auto beat expectations. Import and export prices were hotter than anticipated as well.
While the data seem to support Fed guidance for another 3 or 4 rate hikes in 2018, periods of data inspired optimism have tended to be fleeting. As noted yesterday, there is still cause for concern on the wage and inflation fronts.
Both the BoE and ECB held steady on policy today, and this divergence with the Fed is likely to provide some underpinning for the dollar. That in turn presents a bit of a headwind for gold.
However, seasonal pressures that have been evident in recent years, provide a potentially countervailing tailwind. If the pattern repeats of course.
Silver was able to regain $16 after the Fed announcement yesterday, but those gains have proven unsustainable thus far. Silver is back below $16 and most of the pullback in the gold/silver ratio from yesterday has already been retraced. Silver remains very undervalued, presenting an intriguing value proposition.